Golden cross streak hits a year despite slowdown of M1B

By Amy Su / Staff reporter

Liquidity remained strong in the nation last month as the central bank reported the 12th consecutive “golden cross” month, despite a slowing of the annual growth of M1B money supply as annual growth of the M2 money supply continued rising.

A “golden cross” emerges when the annual growth of M1B money supply surpasses that of M2 money supply.

M1B, a narrow measure of the money in circulation, including currency and passbook savings deposits, rose by 8.05 percent from a year ago, compared with an 8.31 percent year-on-year increase in August, the bank said.

However, the broader M2 measurement — which includes M1B, time deposits, foreign currency deposits and mutual funds — increased by 5.54 percent last month compared with the same period last year, higher than the 5.41 percent increase posted a month earlier, which was the highest level since October 2011, the bank said.

“The month-on-month decrease in annual growth rate of M1B was mainly owing to a higher base last year and adjustments in people’s deposit accounts at banks,” said Chen E-dawn (陳一端), deputy head of the bank’s economic research department.

Chen said M1B could see strong annual growth this quarter due to a low comparison base last year when the stock market was not doing as well.

The outstanding balance of securities accounts of NT$1.332 trillion (US$45.22 billion) last month, the highest level since March last year, also reflected investors’ bullish attitude toward the stock market over the past few months, Chen added.